STOCKS TANK: Here's What You Need To Know

French cyclist Robert
Marchand (C), aged 102, reacts with Gerard Mistler (L), President
of the Ardechoise Cycling Club, after he covered 26.98 kms in one
hour at the indoor Velodrome National in Montigny-les-Bretonneux,
southwest of Paris January 31, 2014. Marchand set a new record in
the Masters + 100 category established by the International
Cycling Union (UCI).REUTERS/Jacky
Naegelen

Stocks fell hard Friday, completing a month that saw the Dow
decline more than 4%. Here's the scoreboard:

Core PCE inflation climbed 1.2% in December, in-line
with expectations. BI's Matt Boesler explains why inflation
reports are the hot new thing. "Given the increased significance
inflation has taken on lately in the Fed's forward guidance on
the likely future path of short-term interest rates, some on the
Street — like Goldman Sachs chief economist Jan Hatzius and
Credit Suisse chief economist Neal Soss — believe inflation
reports are the new jobs reports."

The BEA said personal income and personal spending gains were
basically non-existent last month. "Weakness in hours and
earnings in the employment report pointed to lower wage and
salary income, and slowing farm income support payments are also
likely to be a drag again, so overall personal income should be
little changed," Morgan
Stanley's Ted Wieseman wrote clients.

The savings rate fell to 2008 levels,
but the decline is unlikely to continue. "Even with better
income — December was hit by the weather — we look for
real spending to slow to 2-2.5% from 3.3%. The chart shows
that the saving rate is now below the low seen in the 2002-04
period, before the housing boom allowed it to fall even
further. With a repeat of the housing boom unlikely, the saving
rate likely will struggle to stay at this low level,"
Pantheon's Ian Shepherdson said.